Spin the Bottle
Page 3 of 3

Fiji Water: Spin the Bottle

Obama sips it. Paris Hilton loves it. Mary J. Blige won't sing without it. How did a plastic water bottle, imported from a military dictatorship thousands of miles away, become the epitome of cool?

Perhaps mindful of the unpleasantness of 2000, today Fiji Water executives refer constantly to the company's role in Fiji's economic life. "Our export revenue is paying for the expansion of water access at a pace that Fiji's government has never achieved," the company told the BBC in 2008. "If we did...cease to exist," sustainability VP Mooney told U.S. News & World Report the same year, "a big chunk of the economy would be gone, the schools that we built would go away, and the water access projects would go away."

What Mooney didn't say is that though Fiji Water may fill a void in the impoverished nation, it also reaps a priceless benefit: tax-free status, granted when the company was founded in 1995. The rationale at the time, according to the company: Bottled water was a risky business with uncertain chances of success. In 2003, David Gilmour said that his ambition for Fiji Water was "to become the biggest taxpayer in the country." Yet the tax break, originally scheduled to expire in 2008, remains in effect, and neither the company nor the government will say whether or when it might end. And when Fiji has tried to wring a bit of extra revenue from the company, the response has been less than cooperative. Last year, when the government attempted to impose a new tax on water bottlers, Fiji Water called it "draconian" (a term it's never used for the regime's human rights violations) and temporarily shut down its plant in protest.

While Lynda Resnick has called for "very public conduct" by private companies, she seems to appreciate that, as she wrote in her book, "transparency is a lot easier to talk about than it is to realize." The closely held company won't disclose basic data about its business (such as total charity expenditures), and it's gone to some length to shelter assets in secretive tax havens: The Fijian operation, according to court documents filed last year, is owned by an entity in Luxembourg, while its American trademarks are registered to an address in the Cayman Islands.

At the moment, Fiji's government certainly seems in no mood to confront Fiji Water—quite the contrary. "Learning from the lessons of products, we must brand ourselves," Fiji's ambassador in Washington told a news site for diplomats in 2006, adding that he was working with the Resnicks to try to increase Fiji Water's US sales. A Fiji Water bottle sits at the top of the embassy's home page, and the government has even created a Fiji Water postage-stamp series—the $3 stamp features children clutching the trademark bottles.

Fiji Water, for its part, has trademarked the word "FIJI" (in capital letters) in numerous countries. (Some rejected the application, but not the United States.) It has also gone after rival Fijian bottlers daring to use their country's name for marketing. "It would have cost too much money for us to fight in court," says Mohammed Altaaf, the owner of Aqua Pacific water, which ended up taking the word "Fiji" out of its name. "It's just like branding a water America Water and denying anyone else the right to use the name 'America.'"

When such practices are criticized, Fiji Water's response is simple: "They don't have a ton of options for economic development," Mooney told U.S. News & World Report, "but bottled water is one of them. When someone buys a bottle of Fiji, they're buying prosperity for the country." Without Fiji Water, he said, "Fiji is kind of screwed."

UPDATE: News broke in Fiji today (11/18/10) that Fiji Water's top official on the island, Director of External Affairs David Roth, was the reason for the abrupt resignation of the country’s acting prime minister, Ratu Epeli Ganilau. Ganilau shocked the island nation, which has been under martial law since 2009, by emailing his resignation to Prime Minister Voreqe (Frank) Bainimarama, who is traveling in China. Fiji Water is a huge economic force on the island, and the company has been criticized for tolerating Bainimarama’s military regime; see my in-depth report, below."We had some differences over the David Roth issue," Ganilau told the site FijiLive, without elaborating. Reports from Fiji indicate that a deportation order had been issued for Roth, and Ganilau resigned in protest. (Fiji Water has not yet responded to our request for comment.)

The fight comes at a potentially awkward moment for Fiji Water, which has just been nominated by the US State Department for its 2010 Corporate Excellence Award. The US Ambassador in Fiji has also been making "surprise" visits to Fiji Water's charity events,"touting Roth’s work. US relations with Fiji have been cool, but Secretary of State Hillary Clinton announced during her Asia tour that the US will be re-engaging with Bainimarama's regime by locating a $21 million USAID climate change office in Fiji—a step some consider an attempt to counter China’s rising influence there. "We are going to be working together with Australia to persuade the military government in Suva to meet its commitment to bring democracy back to Fiji," Clinton said.

Page 3 of 3
Get Mother Jones by Email - Free. Like what you're reading? Get the best of MoJo three times a week.